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Personally I think a provider of any 'value add' service being able to dictate the price without their service is insane.
Are any of these food delivery app services actually making profit right now, or are they just burning VC capital? A news podcast I listened to yesterday made the statement that every food delivery company is doing deliveries at a loss. This seems problematic for making delivery a viable business without forming a monopoly to get the scale required to make things profitable.
Nope, they don't make any profit even when charging 30% fees. So this 10% cap will probably cause them to withdraw from the market.
If you think about what a food delivery platform is doing - they are trying to service convenience for customers - they need to deliver on speed at the lowest cost possible. How do you do this when your task is labour intensive and there are few barriers to competitors? You’ve got to drive price down.
Likely there will be a period of consolidation until one service rules a region and then maybe a slow grind back up to profit.
In a country where tipping of 20% is the norm ... there is all of sudden a cap of 10% on what the delivery guy can make?
In a country where tipping of 20% is the norm ... there is all of sudden a cap of 10% on what the delivery guy can make?
In a country where tipping of 20% is the norm ... there is all of sudden a cap of 10% on what the delivery guy can make?
You can still tip the delivery person as much as you like.
Earlier quoted context omitted.
On paper it looks good, and given the players in the arena, there’s not much competition, especially since there’s a high bar of entry for new competition. Perhaps the idea behind not imposing such regulations is a free market argument, in which the most efficient price won’t be selected for, thereby not producing the optimal supply/demand. I would argue against this point that we would be assuming perfect competitio…
> In China, if I recall correctly, they have a food economy such that it’s cheaper to order take out, and have the food delivered, than actually cooking. Is this true? Here in London, a typical delivered meal would cost ~$20, whereas a weekly shop and cooking probably takes 5 hours/week, but costs only ~$2 per meal.
Uber eats I know is losing money and Deliveroo are losing a few hundred million per year on revenues of about $500m. Basically cutting the food percentage like this to 10% would imply delivery services are permanently unprofitable?
Why have all these restaurants signed up if 25% is so unfair?
So as I understand it Deliveroo and Uber eats charge 25% of the food costs, plus delivery fees on top. Uber eats I know is losing money and Deliveroo are losing a few hundred million per year on revenues of about $500m. Basically cutting the food percentage like this to 10% would imply delivery services are permanently unprofitable? Why have all these restaurants signed up if 25% is so unfair?
https://www.theverge.com/2020/1/29/21113876/grubhub-seamless...
So this seems a win on my part.
Earlier quoted context omitted.
> Seems like a solid move Are any of these food delivery companies even making money? What will capping their fees do except make them lose even more?
Who should be losing money? The delivery apps or the restaurants?